Shell Sells Ceasar-Tonga Asset To Delek

Shell Offshore Inc. (Shell) has agreed to sell its 22.45 percent non-operated interest in the Caesar-Tonga asset in the US Gulf of Mexico to Delek CT Investment LLC, a subsidiary of Delek Group Ltd. The deal has been valued at $965 million. The transaction is expected to close by the end of the third quarter of 2019 although the sales and purchase agreement is subject to compliance with certain regulatory approvals. Delek has paid a $50-million deposit to Shell and has also signed a long-term take-off agreement with the subsidiary company of Royal Dutch Shell plc to purchase oil from the field for thirty years. It will be joining other partners who hold interests in Ceasar-Tonga, viz. Equinor Gulf of Mexico LLC (23.5%), Anadarko Petroleum Corp. (33.75%), and Chevron USA Inc. (20.25%).
Shell’s deepwater production is speculated to surpass 900,000 barrels of oil equivalent per day (boe/d) globally by the year 2020 from its existing reservoirs. This will enhance its growth prospects in the regions of the US Gulf of Mexico, Brazil, Nigeria, and Malaysia as well as in emerging offshore areas like Mauritania, Mexico, and the Western Black Sea. The field, operated by Anadarko lies almost 300 km south of Louisiana and is located around 190 miles (300 kilometers) south-southwest from New Orleans, Louisiana in the Green Canyon area of the US Gulf of Mexico. The development area extends to blocks GC683, GC726, GC727 and GC770 at water depths of approximately 4,900 feet (1,500 meters). It contains almost eight wells connected by two pipelines to Anadarko’s production facility in 5,000 feet of water on the coasts of Louisiana and Texas.
Ceasar-Tonga currently produces roughly 70,000 barrels of oil equivalent per day (boe/d). Delek intends to obtain funds for the deal, primarily through reserve-based lending, for $440 million from a consortium of international banks.

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